WASHINGTON (Reuters) -- The United States will withdraw about 4,000 troops from Iraq by the end of October, the U.S. military commander in Iraq said in testimony prepared for a congressional hearing on September 30.

In his assessment of the war, General Ray Odierno will tell the House of Representatives Armed Services Committee that the United States is on track to withdraw all combat troops from Iraq by September 2010.

"We have approximately 124,000 troops and 11 Combat Teams operating in Iraq today. By the end of October, I believe we will be down to 120,000 troops in Iraq," Odierno said in an advance copy of the testimony.

"As we go forward, we will thin out lines across Iraq in order to reduce the risk and sustain stability through a deliberate transition of responsibilities to the Iraqi security forces."

Odierno said the number of U.S. contractors in Iraq has dropped from 149,000 in January to just over 115,000, saving over $441 million. Nearly 100 U.S. bases also have been closed, the testimony said.

A Pentagon spokesman said he could not comment on the testimony because it had not yet been released.

President Barack Obama's withdrawal timetable calls for the U.S. combat mission in Iraq to end on August 31, 2010. However, a force of 30,000 to 50,000 troops will remain to train and equip Iraqi forces and protect provincial reconstruction teams, international projects, and diplomatic staff.

Odierno said that Iraq security is improving, but there are still some sources of potential conflict.

"I call these drivers of instability," he said, listing among them national elections coming up in January, Arab-Kurd tensions, and violent groups within Iraq.

"Al-Qaeda in Iraq, Sunni extremist groups, and Shi'a militant groups continue to pose threats to stability as they seek to exploit political fissures, destabilize the government and undermine the progress made to date," Odierno added.

Violence has fallen sharply in Iraq since the height of the sectarian killing unleashed by the 2003 U.S.-led invasion.